TSI HOLDINGS CO., LTD.
Q1 Financial Results Briefing for the Fiscal Year Ending February 2024
July 13, 2023

Event Summary[Company Name]TSI HOLDINGS CO., LTD.

[Company ID]

3608-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q1 Financial Results Briefing for the Fiscal Year Ending February 2024

[Fiscal Period]

FY2024 Q1[Date]

July 13, 2023

[Number of Pages]

18[Time]

10:00 – 10:38(Total: 38 minutes, Presentation: 15 minutes, Q&A: 23 minutes)[Venue]Webcast[Venue Size][Participants]

62[Number of Speakers]

3Tsuyoshi Shimoji
Masanori Maekawa
Genya Oshiki

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Presentation
Moderator: Good morning. Thank you for joining us today. The time has come for the TSI HOLDINGS, CO.,LTD. financial results meeting for Q1 of the fiscal year ending February 28, 2024.
First, we will present a video of the financial results presentation, and then we will begin the Q&A session.
Now, please take a look at the video of the financial results presentation.
[Video Begins]

Company Representative: Good morning, everyone. We will start the financial results meeting for Q1 of thefiscal year ending February 28, 2024.
We will start from the performance highlights.
First of all, consolidated net sales were JPY39.37 billion, 103.3% of the previous year's level. Sales wereaffected by a withdrawal from business last year. Sales of the US subsidiary struggled due to inflation in theUS, and as a result, sales of the US subsidiary were 103.3% of the previous year's level, but overall, the sales
recovered moderately. However, there are still some issues left..
Operating income was JPY1.83 billion profit increase or 114.5% of the previous year’s level. Net income forthe quarter was JPY1.98 billion, minus JPY70 million, or 96.4% of the previous year's level.

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We will move on to performance trends.
Gross profit was JPY22.56 billion, 101% of the previous year's level. This is due to exchange rates, raw material
price hikes, and an increase of the composition rate of wholesale sales. Gross profit deteriorated. Gross profit
decreased by 1.3%, even though there was an increase of JPY210 million from the previous year.
SG&A expenses were JPY20.72 billion, or 99.9% of the previous year's level. The SG&A ratio improved by 1.8%
from the previous year, which was even better than in the previous year, when it improved due to a subsidy.

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Next are items that affect net income.
With the addition of non-operating income such as dividend income and real estate income, ordinary income
was JPY2.42 billion. With the addition of extraordinary income of JPY150 million such as gain on sales ofinvestment securities and impairment loss, and income tax adjustment, net income for Q1 was JPY1.98 billion
with a profit margin of 5.1%.

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4Next, we will present an overview of sales by channel.
Although a recovery in demand for outings for pleasure and business purposes provided a tailwind, the growthof ladies’ brands, which had shown earlier recovery, slowed down.
And then there was the impact of withdrawal brands.. As a result, profitability improved, but we were unable
to fully increase sales. Considering this as another opportunity for us to move on to the next phase of ourbusiness, we would like to start new businesses.
Wholesale sales, on the other hand, are strong in the golf and street businesses. We believe that the market
has remained strong and have high expectations for the future.

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5Now, here are trends by channel.
With the easing of behavioral restrictions and transition in the categorization of COVID-19 to class 5 infectionin Japan, our free-standing stores are doing very well. Street brand stores especially performed strongly. In
particular, directly managed stores such as STUSSY, Schott, and LHP in the Omotesando to Meiji-dori area,
have experienced a significant recovery. This is also largely due to customers visiting Japan from overseas.
New fashion is in very high demand, and in this sense, we see multi-brand stores as very effective.
With regard to overseas business, in the US, due to high commodity prices and high inflation, there is an
impact from lower consumption. In some businesses, there was a decrease in sales due to delays in deliveries
and other factors. Conversely, in the outdoor brand and golf business, including China and Europe, overseas
wholesaling and sales expansion are progressing steadily. This, in turn, tends to boost overall exports.

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Now, here are the EC sales results.
We were affected by the withdrawal of some businesses and the termination of the agency contract between
SUNSPEL and UNDEFEATED.As a result, EC sales decreased, but existing business EC sales remained at thesame level as in the previous year.
As a negative factor, sales of collaborative sneakers were delayed, which resulted in lower sales. But in a sense,
we are in a position to make up for the delay, as we plan to launch it in the second half. Sales in the multibrand and street businesses are expanding and will rise again in H2 as a positive factor in the form of an offset.
Total EC sales were JPY9.67 billion, down from the previous year, but as mentioned earlier, existing businesses
remained at the same level as the previous year.

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7Here is an individual overview of the main brands.
Sales of mainstay brands remained strong. Out of the top 10 brands in terms of sales, nine brands exceeded
the sales of the previous year.
PEARLY GATES was down from the previous year, but the golf business as a whole remains strong, and threegolf business brands are in the top 10 coming in at first, seventh, and 10th place.
In addition, NANO universe, which had been struggling until the previous year, is on a recovery trend, which
is very positive for us.

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Now, we will explain the balance sheet.
First is cash and cash equivalents. Inventories increased compared to the previous year. The largest impact
was JPY5.7 billion in debt repayments, resulting in an overall decrease of JPY9.1 billion.
Second, we will explain inventory. Inventory increased 136.4%, or JPY7.2 billion, from the previous year, due
to the bulk purchase of long-selling products and standard items in anticipation of a future market recovery,
delivery delays for some focused products, and inability to sell inventories. In July, we will balance our futurepurchases with the risk of retention at the start of the next fall and winter season, but we are also hoping togenerate some large sales in August.
Treasury stock, as compared to the previous period, increased by JPY740 million due to the ongoingacquisition of treasury stock as part of the Company's capital policy and shareholder return policy.

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9Here are the initiatives for TIP 25 and each division.
For wellness & lifestyle, we will create compelling communities. Net sales totaled JPY12.64 billion, a growthof 102.2% compared to the previous year.
Regarding the four divisions, wellness & lifestyle accounts 32.5%. As a breakdown, “and wander” is growing
rapidly. The situation of COVID-19 settled down, and our storefront and wholesale businesses have been
growing very well. The PING golf brand opened its first free-standing store in Sapporo.

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10Next, we move on to street & culture.
The concept is fun platforms rooted in the spirit of street life. Net sales totaled JPY13.51 billion, showing 106%
growth over the previous year.
As a percentage, street & culture accounts for 34.7%. AVIREX has opened a new store in Harajuku, more
specifically in Uraharajuku. AVIREX itself continued to perform well, with a 116.3% YoY increase.
LHP, also within the Ueno Shokai Group, is a multi-brand store that has become very popular for its uniqueitems and is also doing very well with a 136.9% YoY increase.

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11Here is the fashion capital.
We are providing services that respond to trends and changes. Net sales were JPY9.73 billion, 106.4% of theprevious year's total. The composition ratio is 25%.
We would like to achieve further growth for NATURAL BEAUTY BASIC. The structural reforms initiated lastyear have been successful, and both sales and profits have continued to increase. In particular, LIMITEDEDITION, which is available in limited stores, is doing particularly well.
In addition, human woman is celebrating its 25th anniversary with the Go green Project, a new suggestion
with the aim of creating opportunities to meet items, people, and events. We are conducting diverse brandingthat includes many events and general merchandise.

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12Now, we will explain digital generation.
The theme is contents that capture the ever-expanding next generation. Net sales were JPY3.07 billion,
102.7% of the previous year's total. The denominator is still small, but the sales composition is 7.9%.
JILL by JILLSTUART is creating blockbuster products by commercializing customer feedback. We conductedcolor simulations for ruffle tote bags on Instagram to hear from customers, and we selected colors based on
customer feedback. The launch of the ruffle tote bags has become a big hit, with a total of more than 35,000
items in the series. Through this kind of relationship with our customers, we are planning various projects.
ETRÉ TOKYO is directed by influencer JUNNA. We opened a YouTube channel in May. Before, postings on
Instagram were created in a very short period of time. However, we are planning to spend more time working
on content to create more easy-to-understand and enjoyable projects.

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13This is about our efforts regarding the SDGs. The Company has established policies and added materiality.
Following the Human Rights Policy formulated in February of this year, we have formulated our Sustainability
Policy, Governance Policy, Environmental Policy, and Social Policy. We have also conducted a materiality
review and identified 12 materiality.
We have also updated our website on the SDGs, so we hope you will have the opportunity to look at it. Under
solid governance, we will firmly promote the implementation of initiatives against the 12 materiality.

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14Here is the report on the TSI GROUP’s SDGs activities.
We are striving to achieve our goal of zero clothing waste. We will promote recycling of garments, including
leftover fabric.
Now, here are some case examples. As the first case example, we held an art exhibition with art college
students in order to sublimate clothing waste into artwork.
In the second case, we have begun to use aprons made from reused leftover fabric in some of our stores asuniforms.
Third, we are also working with clothing schools, and in April of this year, we began working with Bunka
Fashion College. Our employees will support clothing production by teaching classes and donating leftoverfabric. We have been doing this for a long time, but we are now doing it more fully. We have also set up
collection boxes for clothing on campus so used clothing can be recycled again as a resource, and our company
and schools are working together to expand the circle.
The power of fashion entertainment creates empathy and social value around the world. Setting this as thepurpose, TSI, a fashion entertainment creation company, will firmly reform and improve H1, and will continue
to strive toward its goal while making further progress.
Basically, we will make further efforts to achieve this goal so we may report good results. Thank you verymuch.
[Video Ends]

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______________
Document Notes
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2.
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4.

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TollfreePortions of the document where the audio is unclear are marked with [Inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

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